As the nation mourned the victims of an earthquake that hit Yushu, Qinghai province a week ago, China announced Wednesday that the deposit reserve requirement for financial institutions in the quake-hit areas will be lowered by 1 percentage point to encourage lending for disaster relief and post-quake reconstruction.
Meanwhile, the lending rate of central bank loans to local financial institutions for supporting agriculture and rural economic development in the quake-hit areas will be lowered by 1 percentage point from current levels, according to a joint statement issued by the People's Bank of China (PBOC), the China Banking Regulatory Commission, the China Securities Regulatory Commission and the China Insurance Regulatory Commission.
The central bank will allow a grace period until the end of June 2011 for repayment of overdue loans extended before the quake, without taking any punitive actions on related financial institutions, and will continue to lend them credit support for disaster relief efforts, the statement said.
The approval procedures for granting credit will also be simplified to increase efficiency, among other measures to aid the reconstruction of the quake-stricken areas.
Su Ning, vice governor of PBOC, said the adjustments were aimed at recovering local financial services as soon as possible and more measures would follow to support the rebuilding of the disaster areas.
Su also said the adjustments would have no impact on the total amount of credit. But he did not give his estimates of the amount of money needed for disaster relief and post-quake reconstruction.
A 7.1 magnitude earthquake hit Yushu, Qinghai province on April 14, leaving 2,183 dead and 84 missing as of Wednesday.
